The ManicaPost
Chigumbu Warikandwa Post Correspondent
THE property sector is one sector that has remained buoyant inside a depressed macro economy.
This is largely driven by the local market’s quest for immovable property and investments by Zimbabwe’s expatriate workers spread in the Diaspora. The Zimbabwean economy, once beaten by runaway inflation, property has proved to be a secure alternative store of value and a bankable investment which both firms and individuals trust ahead of all else.
With this background, the demand for property has always outstripped supply as local authorities have for long been limping far behind the quest for both residential and commercial land.
As of 2015, there was an 800 000 strong waiting list in all the country’s municipalities, and so huge was the demand for land that the Ministry of Lands had to compulsorily acquire 28 farms from Mashonaland Central and Mashonaland East to meet the demand for land in Harare alone.
Earlier this year, cement manufacturer, Pretoria Portland Cement (PPC) built a state-of-the-art cement factory in Harare which was commissioned by President Mugabe. PPC is a strong public company listed on the Zimbabwe Stock Exchange. The confidence shown by the company in the economy dispels the negative word peddled about Zimbabwe being an unsafe investment destination and that there is hope in the Zimbabwean construction industry.
The demand for property in Zimbabwe is a mammoth task whose accomplishment cannot be achieved by Government alone. Smart partnerships are the way to go in domestic resource mobilization to discharge this national duty. Efforts made by PPC are plausible in attaining this goal.
Delivery of housing is an important Government deliverable to the people. Government has two ministries with the purview over housing delivery, namely the Ministry of Local Government, Public Works and National Housing together with the Ministry of Rural Development, Promotion and Preservation of National Culture and Heritage.
Efforts made by these two ministries must be complemented by the private sector to deliver housing to the people.
Old Mutual, through its investment vehicle Central Africa Building Society (CABS) has developed 2 800 low cost housing units west of Budiriro. Though uptake is slow, the well built suburb is a good specimen of public-private partnerships in the development of social services aimed at reducing poverty. CABS has another $6 million housing project in the offing.
In Bulawayo, 85 percent of people on the housing waiting list belong to the low income bracket. This indicates the need to develop quality pro-poor housing. If the Bulawayo situation is anything to consider, it entails that housing remains a great need for the poor whose provision would improve their standard of living considerably.
Rentals remain the biggest cost to any family, with a two-bedroom house asking for anything above $250 in an economy where average formal employers pay less than $600 per calendar month. If 40 percent of disposable income goes towards housing alone, such a breadwinner and his family would be rendered poor.
The setting up of a housing development authority in the name of Urban Development Corporation (UDCorp) is a positive Government initiative aimed at facilitating business doing in the housing sector. UDCorp was established as an intervention to stop the creeping corruption in the cooperative housing development schemes some of which turned bloody.
Already, Government has injected $30 million into UDCorp to capacitate it in its mandate in housing development. Government’s resolve to establish UDCorp in reaction to the challenges bedeviling housing development is a step in the right direction in easing doing business in this important sector.
Lately, ease of doing business in Government has been a strong theme driven by the Office of the President and Cabinet so as to catalyze the economy to reach its full potential.
The property sector is big money business and has the potential to spur the economy to greater heights. Investment in this sector is a sure way of realising profit. Financial giants, banks and Old Mutual included have poured money in this sector in various cities across the country. In Harare, there is hardly any street without Old Mutual Properties.
Fidelity Life Assurance has poured $50 million at Langford Estate, 20km south of the Harare CBD to develop 9 300 residential stands. The three phased project is at various stages of completion with phase one already sold out.The property giant is expected to reap $200 million from the investment.
Under the Zim-Asset Infrastructure and Utilities Cluster, Government expects to deliver 100 000 housing units.
The property market is bullish with Government’s intention to deliver housing to its 500 000 strong work force.
With UDCorp already hitting the ground running on this errand, the ball is now on the private sector’s court to come on board on this development ship.
Housing delivery remains an important key result area in fighting poverty; the first of the seventeen Sustainable Development Goals driven by the United Nations to be achieved before 2030.
